Dymocks Holdings Pty Ltd Innovate to Stay Competitive - InfobookWho Are We and What Market Do We Operate In?  My Role  Head of Business Strategy  Responsible for analysis of current market position and development of business strategy to increase market share and sales.  Who are we?  Global company with an Australian Presence established in 1879. Over 60 Stores Across our Australian Network.  Primary Stock – Books, e-books, CD’s and DVD’s.  Operate both Bricks and Mortar and online stores  Second Largest Book Store Chain in Australia with 5.3% of the market  Total 2015-16 Revenue of $91 Million increase of 2.2% from 2014-15 FY. Outperformed the wider market.  Utilise a Functional Organisation Structure where each function represents the major components of our Value Chain. i.e purchasing, sales, 0 0.5 1 1.5 2 2.5 78 80 82 84 86 88 90 92 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 % Change From Previous Year Revenue ($ Millions) Financial Year Dymocks Financial Performance Revenue ($ Millions) % Change Inbound Logistics Operations Outbound Logistics Marketing and Sales Human Resources Business Strategy Technology and Firm Infrastructure Dymock’s Value Chain and Organisation Functions Primary Activities Secondary Activities (Burgio-Ficca, 2016)Market Conditions and External Business Drivers  Market Conditions  Low concentration of market share - Four major competitors holding under 16% market. 84% market share from small/ independent bookstores  Total Market Revenue $1.7 Billion down from $5.13 Billion in 2004.  Australian bookstore average market annual growth from 2011-2016: -10.6%  Australian bookstore market predicted annual growth 2016-2021: -4.2%  Predicted Australian online bookstore market 2016-2021: +12.45%  Key External Business Drivers  Growth in the IT and telecommunications – Increasing demand for e-books and other online products  Demand from Online Shopping – Ability to compare and buy products over the internet effects profitability of bricks and mortar book stores.  Currency Exchange Rates – Australian dollar exchange rate effects the purchasing power of Australian consumers for buying overseas products.  Household Discretionary income – The amount of discretionary income affects the demand of books. 6.1% 5.3% 2.7% 2.0% 83.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Market Share Book Stores Australian Book Shop Industry Market Share -20.0 -15.0 -10.0 -5.0 0.0 5.0 0 1000 2000 3000 4000 5000 6000 Percentage Change (%) Revenue ($ Millions) Financial Year Australian Bookstore Industry Revenue Revenue ($ Millions) % Change (Burgio-Ficca, 2016) (Burgio-Ficca, 2016)Competitive Forces& Key Success Factors  Key Success Factors for the Australian Book Store Industry  Ability to control stock on hand – Ensuring sufficient stock is held in store during periods of peak demand without significantly increasing holding costs  Attractive store/product presentation – Stores should be set out strategically to ensure customers are enticed to enter into the store  Ability to sell an experience not just books – The stores must offer a service/product that buying online can not replicate.  Experienced and Knowledgeable workforce – This key success factor will increase customer experience prompting repeat customers and increased business through word of mouth.  Close monitoring of competitors and their product offerings. Competitive Forces in Australian Book Store Industry Competition Among Sellers Barriers to Entry Substitute Products Supplier Bargaining Power Buyer Bargaining Power Strong Low High Medium High • Low switching costs between stores and competitors. • Competitors sell similar product range • Declining growth in the bricks and mortar book stores • Low market capitalisation by four biggest companies • Small capital investment to start an independent bookstore • Brand preference is weak with low degrees of customer loyalty • Government Incentives for small business • Increase in mobile technology increasing growth of “e” products • Cheaper alternatives to hard/soft cover books (“e”books). • Strong brand equity for large online book sites (Amazon, Kobo) • As the rights to books are often owned by the publishing companies they set the prices of products • Not viable for book stores to integrate backwards into publishing • Publishing dominated by a small number of large companies. • Dymocks achieves volume discounts compared to small independent stores • Cost of switching is low • Internet has increased buyers knowledge about products, prices and costs (well Informed Customer). • Industry products are standard with little differentiationSo How Do We Become More Competitive?  To become more competitive as a business we need to:  Increase customer satisfaction which in turn increases chance for high customer retention.  Increase staff productivity  Provide a more engaged and attentive workforce  Provide competitive prices to negate the impact of large online retailers  Reduce inventory costs by introducing “Just-In-Time” inventory control.Infobook – What is it and Why We Need to Implement it  Infobook is primarily an inventory control System/application which will also increase customer and employee interaction and communication.  Infobook will operate on instore iPad’s (for customer use) and on employee owned personal mobile device (Bring your own Device). How Does Infobook work:  Infobook will utilise bar code technology to monitor inventory levels and prompt the purchasing team to order books to minimise holding costs and allow “Economic Ordering Costs” to be achieved –Ability to control stock and allows implementation of Just-in-Time Inventory Control.  Bar Code Inventory System linked to the entire Dymocks network to allow transfer of inventory between high and slow turnover shops - Increases communication between employees and reduces cost of ordering new stock.  Bar Code Inventory System will allow employees to scan books to find out the books location in store and the number of the particular item in stock or the nearest store with the item. Will allow easy identification of books in store, reduce customer waiting time and will also reduce shelf restocking time.  iPads with Infobook installed will be present at certain locations in each store to allow customers to search titles and view relevant information about the books. When products are searched on the instore iPads, the instore employees will be notified of the search to allow a personalised sales approach. Provides personalised experience and reduces waiting time which both increase customer satisfaction.Log-on Screen and Logging In Home Screen Employee ID Enter Passcode  Basic Home screen with minimal functionality  Employee Passcode requirement to Log on to App  Passcode used instead of password to reduce time taken to log onEntering Store ID and its Importance Store ID Confirmation Store ID Screen  Store ID an important aspect of Infobook as each store layout and inventory varies.  Ability to enter app and not have fixed Store ID for each employee to allow rotation of employees between stores  Confirmation screen allows user to re-input store ID if entered incorrectly without logging out.Home Screen and Available Functions Home Screen News Screen  Home Screen has three (3) main Functions.  Scan Barcode – Employee can scan the barcode of the book to determine instore information (location, price, stock quantity)  Search Title – Employee can search the title of the book to determine instore information (Location, price, stock quantity)  Dymocks News – Secondary Function which provides important updates & communication to all employeesScan Barcode Function Bar Code Scan Screen Scanned Data  “Scan Bar Code” function allows the barcodes on the books to be scanned to determine store relevant information.  Information presented to staff member includes:  Copies of book in store  Price  Instore Location of Books  Ability to request Book if no copies currently instore.Employee Request Function Request Function Request Screen  “Request book function” allows staff members to request books when the store is out of stock.  If a book is available instore the request button will be inactive.  The “Request Item” screen will show the three closest stores with the book in stock.  Request item will send a notification to the store manager who will verify the request with a code.  Notification will also be sent to inventory control team and the store with the stock to begin postage process.  Request function allows frontline staff to actively request books to ensure timely delivery to customers.Staff Member Search Function  Staff Members can search the book title or author.  Search will allow staff members to assist customers with enquiries when a barcode is not present.  Information presented to staff member includes:  Copies of book in store  Price  Instore Location of Books  Ability to request Book if no copies currently instore. Search Function Search ScreenCustomer Interface Customer Home Screen Search Screen  Three iPads per store, located at the front entrances.  Five (5) functions available to customers including:  Search Title and Author  Dymocks News  Dymocks Events  Request Staff Member  Join Loyalty Programme  The “Search” function will allow customers to search the Title or Author.  Information provided includes: Cost, Star rating, Synopsis, relevant titles and request copy.Customer Search Function Customer Search Notification Search Screen  When a customer searches and item on the instore iPads, employees are notified.  Sale Staff can engage customer knowing what they have searched, providing a personalised experience.Customer Service Request Function  Customers can request staff members from instore iPad’s.  All staff members instore will be notified with the first available staff member accepting request by clicking the button “Attend Request”.  All “Attended Requests” will be recorded which will allow two new KPI’s to be monitored.  Time taken to attend request (Store KPI).  Number of requests attended (Individual KPI)  Infobook will ensure customers requests are processed as fast as possible without them having to locate instore staff members Customer Service Request Attend Request Screen Request Logged : 3:50 pmCustomer Interface – Secondary Functions  “Sales and Offers” will show all sales and offers for both Dymocks instore and online shops.  “Dymocks Events” function will show all activities and dates for Dymock sponsored events.  “Dymocks Loyalty Programme” function allows customers to join the Dymocks Loyalty Programme without staff member assistance or input.Infobook – Customer Function Flow Chart Customer Interface Title/Author Search Information provided for book title (location, Price, Rating) Customer Request Store Notified Employee Store Employees notified of Search Sales and Loyalty Offer Button Sales and Loyalty offers available Information provided for book title (location, Price, Rating) Customer Request Store Employee Notified Request Staff Member Button Store Employee Notified Join Loyalty Programme Button Customer Details Form Employee Log on Bar Code Scan Information provided for book title (location, Price,) Request Book Button Books available other Dymock Stores based on location Selection of book and request sent to logistics teams for approval Search Title Search Criteria Forms Information provided for book title (location, Price, Rating) Request Book Button Books available other Dymock Stores based on location Selection of book and request sent to logistics teams for approval News Dymocks Moderated news stream Customer Request Notification Attend Request Screen Customer Search Notification Information provided for book title (location, Price,) Employee Function Flow Chart Customer Function Flow ChartBusiness Benefits From Infobook Benefit Cause Outcome • Increased customer satisfaction • Personalised sales approach from staff as they are aware what the customer is searching for • Customer Retention • Better knowledge of stock levels across all Australian Dymocks stores • Bar code system will provide a database of all books currently stocked by Dymocks • Ability to better control inventory • Just in time inventory • Ability to achieve economic order quantities • Reduced waiting times for customers • Customers ability to search for availability and instore locations of books • Customers ability to request assistance from staff without finding employee instore • Increased customer satisfaction • Higher customer retention • Customers ability to join Dymocks Loyalty programme instore without employee input • Customers can sign up to Dymocks loyalty programme through instore iPad • Increase in loyalty programme members • Increased staff productivity as do not need to manually input customers into loyalty programme database • Reduced staff members/time required to restock book shelves • Bar code system with in store location of book • Increased staff productivity • Reduction in staff members required after hours • Engaged and attentive workforce • Decision making transferred to lowest employee level creating empowerment within the workforce (employee able to request books, etc) • Customer requests will be attended quickly • More productive workforce • Happier workforce • Customer retention • Promotion of Dymocks events • Instore iPad's have inbuilt calendars containing up coming Dymocks events • Increased publicity • Increased customer satisfaction • Competitive advantage over purely online retailersImpacts on Existing Staff, Processes and Procedures Inventory Control Restocking Shelfs (Front Line Staff) Old Procedure - Staff member searches store for right location of book New Procedure – Book Location saved in database and staff member directed to correct location Ordering Books (Logistics Team) Old Procedure – Book Ordered once stores notify inventory team. Books often ordered individually from supplier New Procedure – Book Inventory always known and books ordered based on metrics such as rate of sales, stock held across all stores Sales Loyalty Programme Membership (Customers and Front Line employees) Old Procedure - Staff member fill out prepopulated forms which are then placed inputted into the computer after opening hours of each store New Procedure – Customers directly input information into iPads which are then stored in databases Assisting Customers (Customers and Front Line employees) Old Procedure – Customers locate staff members instore and ask queries New Procedure – Customers request customer assistance through instore iPads and employees notified through Infobook App. Function Level Process Level Procedure LevelTarget Audience & Implementation Issues for Australian and the Broader Global Company  Target Audience  Front line staff members  Ordering and inventory control team members  Customers  Implementation Issues  Larger Database of information that needs to be stored  Over reliance on Information system that can affect company performance during outages  Security of customer information participating in Loyalty Programme  Customers/Staff members misplacing books in store, resulting in inaccuracies in “location” function  Customers entering incorrect/ false information into the “Join Loyalty Programme” function.Bibliography  Anning, J 2016 “Online Book Sales in Australia”, Ibisworld Industry Reprot OD4097, Viewed 6th August 2016,  Bitner, Cole, Corr, Cox, Le & Obergfell, 2012, Barnes and Noble Book Sellers – Strategic Analysis, 2012, BUSN 162 – Capstone  Burgio-Ficca, C 2016 “Bookstores in Australia”, Ibisworld Industry Report OD5496, Viewed 6th August 2016,  Laudon, K, Laudon J , 2014, Management Information Systems- Managing the Digital Firm, 14 Edn, Pearson, Essex  Mitchell, S 2014, “Change in sales Stretegy Clicks”, The Sydney Morning Herald, 9th September, Viewed 6th August 2016,  Noe, R, Hollenbeck, J, Gerhart, B, Wright, P, 2015, Human Resource Management – Gaining a Competitive Advantage, 9th edition, McGraw Hill, New York  Slack , N, Brandon-Jones, A, Johnston, R, Betts, A, 2012, Operation and Process Management – Principles and Practice for Strategic Impact, 3rd Edition, Pearson, Essex  Thompson, A, Perteraf, M, Gamble J & Strickland, A, 2014 – Crafting and Executing Strategy The Quest for Competitive Advantage, 19th Edition, McGraw Hill, New York